Decoding the Physical Internet

The first email was sent in 1971, and many people look to this as a pivotal moment in the history of the internet. Flag Day, which occurred in 1983, was arguably even more important to enabling the modern internet because that’s when ARPANET switched over to TCP/IP. This is the protocol that standardized data packets in a way that made it possible to transmit information to and from a wide variety of computers and networks. Standardization is the core of what makes the internet so robust, and we continue to see the implications of that today as the Internet of Things brings a huge number of disparate devices online each day.

What if the same principle could be applied to logistics, enabling supply chains to operate with the same speed and efficiency as the internet? It would require a complete overhaul in how products are moved, stored, realized, and supplied throughout the world to come about. That is precisely what the Physical Internet Initiative (PII) envisions in a model it calls the physical internet (PI). With involvement from companies like Boeing, CHEP, P&G, Volvo, HP, Walmart, and J.B. Hunt, PI may not be as far-fetched as it sounds.

Standardizing the Wild West
Much like the internet, PI relies upon a set of rigorous standardization protocols that must be adhered to in order to make the system work. The resulting “logistics web” cuts out waste at every turn, putting an end to proprietary systems and networks. Goods would move through the logistics web through a series of shared networks of lanes and distribution centers, equipped with continually connected technology that makes them instantly visible and trackable in real-time. The ultimate goal is for PI to become smart enough so that it can automatically route each shipment on its optimal path, making changes as conditions dictate instantly.

The core of every aspect of PI standardization lies in new shipping units dubbed π-containers. These composite containers are modular and can be configured in a multitude of ways to accommodate any freight. Able to communicate with each other and every node of the logistics web, these containers encapsulate goods so the network can be designed and function around transporting, storing, and distributing nothing but π-containers — not just on ocean and intermodal transport as today’s containers are used, but for every step of the logistics journey.

Can it really be done?
Millions of π-containers effortlessly gliding through transportation networks directed by algorithms certainly seems like a utopian vision proposed by an imagineer at Disney for the climax of a ride at EPCOT, but the benefits for manufacturers, shippers, and customers could give it fuel. The economic, environmental, and social benefits laid out in the PI Manifesto are riveting and real — there is no denying that we do ship too much air, goods spend too long in supply chains and often perish before they can be sold, and transportation in dense urban areas is challenging. Those economic drivers are likely PI’s biggest allies as sustainability and social changes still require financial advantage for most shippers to implement them.

The big question is, when will the economic advantages outweigh the time, expense, and cooperation required to completely redesign supply chains? In this regard, there is really no comparison to the digital internet because it was designed by governmental and academic organizations, not for-profit entities that have long histories with their own cash cow proprietary networks. Convincing established parcel carriers like UPS and FedEx to start sharing resources will definitely be an uphill battle and the benefits of doing so will have to be compelling.

For now, PI is an interesting idea with a lot of smart and powerful people on board. The ultimate realization of the logistics web will likely look considerably different than the current PI Manifesto dictates, but it is movement well worth keeping track of.

A lifetime IoPP (Institute of Packaging Professionals) certified packaging professional, Chainalytics’ Senior Packaging Consultant Eric Carlson helps clients manage a high degree of complexity that stems from their unique combination of scale, variability and geography.

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